Reservation Week 4 Subject : V0206 – Administrasi & Operasional Kantor Depan Year : 2009 Reservation Week 4

Subjects Importance of guest reservations to travelers and accommodation establishments Reservation system Sources of reservations Forecasting reservations Overbooking (occupancy management) Processing guest reservations Bina Nusantara

Objectives On completion of this lesson, the students will be able to: demonstrate the process of guest room reservation, do the reservation forecasting and handle overbooking Bina Nusantara

Importance of a Reservation System Allows hotels to ensure a steady flow of business Ensure that travelers will have accommodations at their destination Easy access to a hotel’s data bank of room, helps in fulfilling the customers’ need, reaching a targeted daily occupancy rate, ADR, yield % and RevPAR As a mean to produce positive cash flow and a favourable income statement Bina Nusantara

The Use of Reservation System in Hotels Choice Hotels International 500 franchisees in 42 countries Brands: Comfort, Quality, Clarion, Sleep, Econo Lodge, Mainstay Suites & Rodeway Inn Offering guest room services through handheld computers (Palm VII or Palm XIIx) Received 32,000 phone calls at one of its two reservation call- centers per day http://www.choicehotels.com/ires/en-us/html/CorpBrandInformation?sid=rRPg.2c9UnKBu3.1 Bina Nusantara

The Use of Reservation System in Hotels Brand names Choice Hotels International http://www.choicehotels.com/ires/en-us/html/CorpBrandInformation?sid=rRPg.2c9UnKBu3.1 Comfort Inn Comfort Suites Quality Clarion Sleep Inn Econo Lodge Main Stay Suites Rodeway Inn Bina Nusantara

The Use of Reservation System in Hotels Six Continents Hotels 3500 hotels and resorts in nearly 100 countries 535,000 guest rooms Brands: Inter-Continental, Crowne Plaza, Holiday Inn, Express by Holiday Inn, Staybridge Suites Host more than 150 million guests each year and process more than 100 millions reservation per year Reservation system: Holidex Bina Nusantara

The Use of Reservation System in Hotels Intercontinential Brands http://www.sixcontinentshotels.com/h/d/6c/c/2/dec/6c/1/en/ob.html InterContinental Hotels & Resorts Crowne Plaza Hotels & Resorts Hotel Indigo Holiday Inn Hotels and Resorts Holiday Inn Express Staybridge Suites Candlewood Suites Park Inn Hotels Park Plaza Hotels & Resorts Regent International Hotels Experiences over 7 million visits to its web site each month. Bina Nusantara

The Use of Reservation System in Hotels Carlson Hospitality Worldwide Central reservation system: Curtis-C (“Courtesy”) 730 hotel and 6 cruise ships 8,900 reservations per day processed; over 3 million per year (2000) Brand: Regent International, Radisson, Country Inns and Suites, Park Plaza and Park Inn, Radisson Seven Seas Countries Curtis-C interfaces with the company’s hotel via HARMONY (company’s PMS) and CustomerKARE (Customers knowledge and relationship enabling) Bina Nusantara

The Use of Reservation System in Hotels Carlson Brands http://www.carlson.com Regent International Hotels Radisson Hotels & Resorts Park Plaza Hotels & Resorts Country Inns & Suites by Carlson Park Inn Hotels Radisson Seven Seas Cruises Bina Nusantara

The Use of Reservation System in Hotels Carlson - Connected to 455,000 travel agents Carlson - Data Interface HARMONY – the PMS of the hotels Customer KARE system (Customer Knowledge and Relationship Enabling System) Harmony Database Manager – room inventory and room reservations Guest Communication Manager – manages guest satisfaction information KnowledgeNet – provides access to company policies, forms, reports, hotel procedures and newsletters Bina Nusantara

Global Distribution System Global Distribution Systems (GDS) are distributors of hotel rooms to corporations such as travel agents that buy rooms in large volume. Amadeus Galileo SABRE Worldspan Bina Nusantara

Role of the Internet in Securing Reservations Background on Room Rates offered via the Internet Dot.com mania hits consumers ->wholesalers decided to advertise free offers to entice consumers to use the Internet Leaves lasting impression on purchasing manner Wholesaler offers to take empty hotel rooms into inventory and offer on Internet -> hoteliers grateful to sell rooms at low sale prices Internet sales light; everything seems ok Other Internet sites offered similar models with their discounts guaranteed lowest price -> transparency of rates (guest can check room rates before check-in to see if their rate has been offered lower on the Internet) Bina Nusantara

Role of the Internet in Securing Reservations Effect of Internet on Pricing Rooms – Muqbil 2003 35% of Americans used Internet to research travel Real-time rate information availability causes re-book booking, if lower rates are posted Minus $1.27 billion to lower ADR because of increased transparency and price competition and increased revenues due to increased bookings stimulated by the lower rate Internet average rate is 17% less than non Internet rate 75 % were discount seekers and 25% were convenience bookers. Price transparency during low periods is a negative for hotels to increase rate; opposite during peak seasons. Bina Nusantara

Role of the Internet in Securing Reservations Consumers Response to Use of the Internet – Third-Party Websites (Expedia, Travelocity) GDS and Pegasus Hotel e-Commerce room night sales = 57,131,438 (46,510,434 sold by travel agents and 10,621,004 by consumer off the Internet) second quarter 2004 Bina Nusantara

Types of reservation systems Franchisee – hotel owner who leases a brand name and the benefits by: Management expertise Financial backing National advertising Group purchasing Reservation service Bina Nusantara

Types of Reservation Systems Referral Member of a Reservation Referral System - a worldwide organization that processes requests for room reservations at a particular member-hotel, is a hotel developer/owner who has access to the national reservation system 15%-30% of daily room rentals vs. independent status Hilton franchise fees example (2005): Initial fee of $85,000 for first 275 guest rooms or suites plus $300 for each additional room or suite (min. fee to $75,000) 5% monthly gross rooms revenue for franchise fee 4% of monthly gross rooms revenue = monthly program fee Plus other fees for participation in Frequent Traveler/Guest Reward program, training, and computer system Bina Nusantara

Sources of Reservations Purpose: to understand the need of each segment and provide reservation systems to meet their needs Corporate clients A hotel guest who employed by a business Corporate guests will need reservations to ensure a productive business visit Reservation may be initiated by a secretary/ administrative assistant Methods to ensure reservation: toll-free phone number, travel agent, web-site Bina Nusantara

Sources of Reservations Corporate Clients Secretaries Club Toll-free Reservation Referral Chain Travel Agent Web sites (Expedia, Travelocity, Hotels.com) Bina Nusantara

Sources of Reservations Social/Military/Educational/Religious/Fraternal (SMERF) Provides opportunity to fill vacancies in low times These markets are price sensitive and time-relaxed and will travel accordingly. Bina Nusantara

Sources of Reservations Meetings/Incentive/Conference/Event (MICE) Need to locate large group of conference attendees Details: airfares, hotel rooms, room rates, food and beverage, cultural activities, etc. Cooperation of local tourism and travel association necessary Bina Nusantara

Sources of Reservations Group travelers Refer to various travel directories used by hotels and potential guests as listed in the text Group planner Bus association network Virginia Bus Association Pennsylvania Bus Association National Bus Association Travel directories i.e. Hotel and Travel Index Hotel Representative – member of hotel staff who seeks group activity planners Hotel Broker – person who sells hotel room prize packages to corporations, sweepstakes promoters, game shows, and other sponsors (with a discount) Bina Nusantara

Sources of Reservations Leisure Traveler – people who travel alone or with others to visit points of interest or relatives, or for other personal reasons Travel agencies Toll-free numbers Reservation/referral systems Internet Current Guests - an overlooked marketing opportunity Bina Nusantara

Forecasting Reservations Purpose: to preview the income statement It enables hotel managers to determine projected income and related expenses for a certain time period FO Manager has estimated total room occupancy to be 100 room with an ARR of $70 for 7 days period can project revenue of $ 52,500 (100 x $75 x 7) for room sales Room forecast assist in planning delivery of service Bina Nusantara

Forecasting Reservations Bina Nusantara

Confirmed reservations Guaranteed reservations Stayovers Understay Occupancy Management Overbooking Confirmed reservations Guaranteed reservations Stayovers Understay Walk-in guests Occupancy management formula Bina Nusantara

Occupancy Management Overbooking Accepting reservations for more rooms than are available Confirmed reservations Prospective guests who have a reservation for accommodations that is honored until specified time Guaranteed reservations Prospective guests who have made a contract with the hotel for a guest room by providing credit card number to hold a room reservation Stayovers Registered guests who wish to extend their stay beyond the time for which they made reservations Understay Guests who arrive on time but decide to leave before their predicted date of departure Walk-in guests Guests who arrive to a hotel without a reservation Bina Nusantara

Overbooking (Occupancy Management) Overbooking – accepting reservations for more rooms that are available by forecasting the number of no-show reservations, stayovers, understays, and walk-ins, with the goal of attaining 100% occupancy Bina Nusantara

Overbooking (Occupancy Management) In many instances, overbooking to overcome the problem of no-shows and late cancellations may produce advantages by way of operating efficiencies that far outweigh the occasional inconveniences to guests and travelers.” Hoteliers and front office managers who practice overbooking do so to meet an organization’s financial objectives. They do not intentionally overbook to cause problems for the traveler.” Bina Nusantara

Overbooking (Occupancy Management) Components of overbooking Confirmed reservations – 4 pm or 6 pm check in Guaranteed reservations – credit card required Stayovers Understays Walk-in guests Bina Nusantara

Overbooking (Occupancy Management) Revenue Management “A management technique of planning to achieve maximum room rates and most profitable guests” Bina Nusantara

Occupancy Management Formula Total number of rooms available (-) confirmed reservations x no-show factor (-) guaranteed reservations x no-show factor (-) predicted stayovers (+) predicted understays (-) predicted walk-ins ________________________________________ = number of additional room reservations needed to achieve 100% occupancy Bina Nusantara

Occupancy Management Formula 200-room lodging property has 75 confirmed reservations with a 5% no-show factor There are 100 guaranteed reservations with a historical no-show rate of 2% Predicted stayovers: 4 rooms Predicted understays: 5 rooms Predicted walk-ins: 8 Bina Nusantara

Occupancy Management Formula 200 rooms available (-) 71 confirmed reservations (75 – [75 x 0.05]) (-) 98 guaranteed reservations (100 – [100 x 0.02]) (-) 4 stayovers (+) 5 understays (-) 8 walk-ins = 24 number of additional room reservations needed to achieve 100% occupancy The formula indicated to FOM that 24 additional rooms must be rented to achieve 100% occupancy  by predicting this number in advance, FOM has reasonable flexibility in accepting 24 additional reservations for the day Bina Nusantara

Processing Guest Reservations Systemwide Reservation Systems Operational procedure: Greeted by an operator Guest places of request for dates and accommodations Operator checks availability of request with room data bank Operator suggests alternatives Bina Nusantara

Processing Guest Reservations Outsourcing reservations – providers of central reservation systems that are not owned by the hotel operation Internet Global Distribution System (GDS) – Amadeus, Galileo, SARE, and World Span Web-enabled application-service provider (ASP) Components of SynXis Agent (Allows hotel operators to consolidate and control hotel inventory from all booking sources. ) Central reservation system GDS connectivity Alternate-distribution system connectivity Book-A-Rez Pegasus Solutions Real-time availability and pricing for property and room types Interfaces with key industry PMS, revenue systems, and loyalty program systems to approximately 7500 hotels Bina Nusantara

Processing Guest Reservation Confirmed reservation – a reservation that is held until 4pm or 6pm; discuss implications on profit and loss statement Guaranteed reservation – a reservation that is held with a credit card until the guest arrives; discuss implications on profit and loss statement Bina Nusantara

Processing Guest Reservations Reservation codes for confirmed or guaranteed reservations Components I.D. number of property Initials of reservationist Date of arrival Date of departure Type of credit card Room rate Type of room Sequential reservation number Bina Nusantara

Processing Guest Reservations Cancellation code Components I.D. number of property Initials of person who processed the reservation Date of arrival date of departure Sequential number of cancellation Blocking procedure – removing rooms from the available room data bank for the dates involved blocking on the horizon – in the distant future daily blocking assigning guests to their particular rooms on a specific day of arrival Bina Nusantara

Completing Reservations through a PMS Guest data Data about the guest who makes a reservation (name, address, ph. number, date of arrival & departure, flight no., #guests, rate, etc) Room inventory To indicate the availability of a guest room to be rented on a particular night, that is: OPEN (room is available for renting) CONFIRMED (room has been reserved until 4 or 6 pm) GUARANTEED (room has been reserved until guest arrives) REPAIR (room is not available for guest rental) Deposits Would be assessed when the clerk needed to determine whether the guest has a deposit on file Special requests To determine if rooms are available to meet the specific needs of a guest Bina Nusantara

Completing Reservations through a PMS Blocking Provides reports to the FO Manager on which rooms are to be reserved for incoming guests on a particular day Arrivals Lists the guests that are expected to arrive on a specific date Departure Lists the guests that are expected to check out on a particular date VIP Provides information on guests with VIP status Projected occupancy Provides the various departments in the hotel with information concerning the number of guests who will be in the hotel on a certain day Guest messages Allows the front desk clerk to relay information to the guests on registration Bina Nusantara

Processing Guest Reservations Database Interfaces Transferring of computer information (captured at the time a reservation is made) between computers Examples Marketing and sales office Housekeeping staff Maintenance crews Food and beverage Controller’s office Bina Nusantara

Processing Guest Reservations Database interfaces True Integration Integration of central reservation system and property management system sharing database. Benefits: Consumer can access real-time reservations Less investment for data storage Hotels can access data via Internet Bina Nusantara

Group Discussion Week 4 Discuss how reservations are a necessity for travelers Discuss how reservations are a necessary marketing tool for hotels Discuss Importance of a reservation system Discuss the role of reservations in producing a profit in a hotel Bina Nusantara

Case Study Week 4: Room Forecast Use the following data to prepare a rooms forecast for the first week of May for the Grand Hotel No. of rooms available = 600 No. of rooms occupied on April 31 = 300 Bina Nusantara

Case Study Week 4: Room Forecast 5/1 5/2 5/3 5/4 5/5 5/6 5/7 Departures 200 50 300 Arrivals 100 70 175 180 - Confirmed 70% 60% 50% 20% 30% 92% 10% - Guaranteed 40% 80% 8% 90% Walk-ins 40 10 20 25 No-shows (% of expected arrival) 0.02 0.01 0.0143 0.04 0.0223 Bina Nusantara

THANK YOU AND HAVE A GOOD DAY Bina Nusantara